What role do customers play in a business?

Customers are considered external stakeholders because they are not involved in the daily operations or management of a business but still have a significant impact on its success. They influence demand for products and services, shape the company's marketing strategies, and are vital for providing feedback that can lead to improvements and innovations.

External stakeholders, like customers, do not take part in the organization’s internal decision-making processes, but their opinions and behaviors can greatly influence the direction of the business. This differentiation is crucial in understanding stakeholder theory, as it emphasizes how different groups, including customers, interact with and affect the business environment.

In contrast, internal stakeholders typically include employees and management, who are directly involved in the company's operations. This distinction highlights the unique position of customers as external parties whose needs and satisfaction are essential for the business's viability and growth.